A full-time force should be established to eliminate organised crime gangs involved in illicit cross-border fraud between Northern Ireland and the Republic, a meeting of MPs from Britain and Ireland said.

Revenue and customs commissioners north and south and criminal asset recovery and environmental agencies should be involved in the crackdown on duty free fuel and tobacco, the British/Irish Parliamentary Assembly (BIPA) said.

It added on-the-spot fines could be introduced for consumers found to have knowingly bought the commodities. Cigarette fraud alone cost the Irish Exchequer up to 575 million euros (£424m) in 2013 while the UK's "tax gap" from tobacco smuggling was £2 billion in 2012/13, a report from the BIPA said.

It added: "The committee recommends that the cross-border enforcement groups establish a permanent, full time taskforce dedicated to eliminate the activities of organised crime gangs involved with cross-border illicit trade."

The BIPA includes Westminister MPs, TDs of the Irish Dail, the Stormont assembly and legislatures in Scotland and Wales.

It met in the Irish Parliament, Leinster House, on Monday.

Lucrative black market cross-border trade between the Republic and Northern Ireland in tobacco, duty free fuel which has been laundered to remove markers and other commodities, has been a problem for many years.

A new fuel marker is to be added later this year to try to curb the incidence of diesel laundering.

Key recommendations of the BIPA report included:

The Irish and UK governments should introduce more lengthy custodial sentences for illicit trade to make Ireland more difficult for criminal gangs to operate.

Legislatures should examine company law to try to prevent firms which have been detected from transferring to another legal entity enabling business as usual.

The report said: "The committee is alarmed by the evidence of the widespread presence of fuel laundering plants and filling stations selling illicit fuel in border regions.

"The committee stresses that those involved must not be allowed to continue this illegal activity and every effort must be made by law enforcement authorities in their collaborative efforts to shut down these operations, despite the difficulties in policing some of these areas."